020 Salaries – Owners / Executive Managers
Expenses
Personnel
Synopsis
The compensation paid or accrued to Owners (Dealer Principal) and Executive Managers is recorded in Account 020, Salaries – Owners / Executive Managers. Bonuses are not included, in this account. Bonus payments should be recorded in Account 098, Bonuses-Owners.
Debits |
Credits |
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Example 1
Record the monthly accrual of commission for the Executive Manager in the amount of $30,000.
Journal: Payroll
Entry: |
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Debit |
Credit |
Account 020-09 |
Salaries – Owners/Executive Managers – General & Administrative |
$30,000 |
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Account 321 |
Salaries, Wages & Commissions Payable |
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$30,000 |
Distribution of Expenses
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Departmental Distribution |
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020 Salaries-Owners/Executive Managers |
New Veh. |
Used Veh. |
Lease & Rental |
Mechanical |
Body Shop |
Parts & Access. |
Gen & Admin. |
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01 |
02 |
03 |
05 |
06 |
07 |
09 |
Compensation (including absentee compensation) of a sole Owner |
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Total expense |
Compensation of inactive Owners |
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Total expense |
Compensation of an additional Owner functioning as the service manager |
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Time |
Time |
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Compensation of Executive Managers |
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Total Commission |
Comments
Only compensation paid or accrued to the Owners and Executive Managers are recorded in this account. Employees who own shares should have their salaries recorded in their respective categories.
Note:
Professional tax and accounting advice should be obtained regarding compensation paid to Proprietors and Partners in order to minimize tax obligations for both individuals and the dealership.